Key points
- The Energy One share price is rising 6.2% today
- Energy One has entered a share purchase plan to take over CQ Energy Group
- The total cost of the acquisition is $36 million
The Energy One Ltd (ASX: EOL) share price is soaring today amid news the company has entered an agreement to take over an energy services company.
The company's shares are trading at $6 in morning trade, up 6.2%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.39% at the time of writing.
Sydney-based Energy One supplies software and services to energy, environment and carbon trading markets in Australia, the United Kingdom and Europe.
Let's take a look at what the energy company revealed to the market today.
Energy One share price rises on acquisition
The company announced it will take over CQ Energy Group based in Adelaide. Energy One said it has entered a share purchase agreement to acquire 100% of CQ Energy Group.
CQ Energy provides 24-hour operational energy services to the Australian gas and electricity sector and has 20 staff and more than 30 customers, including wind farms, solar farms and industrial gas providers. Energy One describes the new addition as its "largest acquisition to date".
The acquisition is the latest in a string of takeovers by Energy One. The company took over Belgium-based Egssis in December 2021 and French-based eZ-nergy in June 2020.
Commenting on the latest takeover, group chief executive officer Shaun Ankers said:
The acquisition of CQ Energy builds on our strategy of developing a global 24/7 energy software and services business.
CQ enhances our capability and now provides us with the opportunity to establish a global energy services operation with control rooms in both the northern and southern hemispheres.
Energy One said the $36 million purchase includes cash and equity over 12 months. The initial outlay involves $26.4 million in cash and $6 million in Energy One shares.
Speaking on the new team, Ankers added:
CQ Energy is a very sophisticated business providing high quality operational services to the Australia [sic] energy trading market (West Coast and East Coast). And we are very excited to welcome them into the family.
I'd like to welcome Reza Evans, Ian Tannebring & Lino Fusco to our leadership team.
Energy One predicts the CQ acquisition will add about $7 million revenue and $4.5 million in earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first financial year after consolidation. Overall, it is expected to grow its current EBITDA by about 50%.
Share price snapshot
Shares in Energy One have slipped 3.07% in the past 12 months. In the past month they have fallen 1.15%, while they've dropped 2.44% in the past week.
For perspective, the ASX 200 has returned 5.18% in the last 12 months.
Energy One has a market capitalisation of about $159 million based on its current share price.
